The expected real estate index showed a decline in real estate transactions after the implementation of the new mortgage regulation (16/1/1436 AH), which requires the payment of 30% as a down payment to obtain financing for the purchase of housing or land. Indicates a decline in sales during the fourth week of Muharram (Sunday, January 23, 1436 AH). Until its end, with total trades amounting to more than 6 billion riyals in all cities of the Kingdom in the residential sector, including 1.7 billion riyals in Riyadh, and the total trades in the (last week) and after the implementation of the regulation amounted to 8.4 billion riyals, including 2.3 billion riyals in the commercial sector, in all regions of the Kingdom.

Western Region
The real estate index concluded the month of Muharram with Riyadh leading the number and value of real estate transactions with 5.583 thousand transactions worth 12.7 billion riyals, distributed as follows: 4.978 thousand land transactions, 257 apartments, 137 villas, and 1489 buildings.
In the western region, the city of Jeddah came second with 3.099 thousand real estate transactions worth 5.91 billion riyals, distributed as follows: 2.578 thousand land deals, 485 apartments and 19 villas, thus Jeddah leads the number of apartment sales over all cities in the Kingdom.
In all cities of the Kingdom, the number of transactions carried out during the month of Muharram amounted to 28.690 thousand transactions, of which 84.6% for the residential sector with 24.283 thousand transactions, and 4.407 thousand transactions with 15.4% for the commercial sector. They were distributed as follows: 24.988 thousand land deals, 1.678 apartments, 215 villas, and 156 buildings. The number of real estate transactions during the month of Muharram was distributed in the regions of the Kingdom in order as follows: Riyadh region (30.5%) with 7.398 thousand transactions, Makkah region (18.6%) with 4.506 thousand transactions, Eastern region (16.1%) with 3.915 thousand transactions, Qassim region (9.3%) with 2.251 thousand deals, then Medina (7.9%) with 1.924 thousand deals, then Hail (4.2%) with 1.021 deals, and Asir (4.1%) with 995 deals.

Villa sales decline
On the other hand, the Saudi real estate market ended its second week since the start of the full mandatory implementation of the financing regulations, and it may be too early at this time to judge with certainty whether it will be affected or not, and the degree of that impact, despite the stagnation that began before the implementation of the regulations at the beginning of this month. The degree of impact will be confirmed in the coming weeks or even two months, a period that is burdened with the monitoring of various indicators and factors locally and externally, distributed between monitoring the impact of financing systems and regulations on the one hand, and on the other hand monitoring the fluctuations in the global oil price, as it has very important implications for the inflows to the economy, as these flows are the most important provider of government spending levels in the national economy, and the strength of their impact on local liquidity levels, in addition to the other factors involved in the decision to impose fees on land within the urban area.


Real estate prices
Indicators of the real estate market since the beginning of this year have shown a difference in their trends, while sales in the residential sector in terms of agricultural lands, houses, apartments and plots of land for the period from the beginning of the year until the end of last week, compared to the same period last year, increased at growth rates of 11.8 percent, 72.8 percent, 19.0 percent, and 3.5 percent, respectively, were offset by declines of 23.7 percent and 38.6 percent for residential buildings and villas, and the result of all these variations was a slight growth in the number of residential properties sold during the period by about 3.7 percent.
However, when looking at the developments in the last three months of this year and comparing them to the same period last year, the developments tilted in favor of the decline, with the decline rates for houses and villas rising to 37.1 percent and more than 43.6 percent respectively, and growth for the rest of the other items tended to slow down at rates lower than those achieved during the longest period since the beginning of the year.


This is due to the presence of new influences and factors on the market during the recent period, the most important of which were mentioned at the beginning of the report (internal and external factors), and the picture is expected to become clearer in the coming weeks, which may extend to January 2015 or the following two months at the latest, a period that will include the clarity of the decision to impose fees on land within the urban area, and the announcement of the general government budget for the next fiscal year.

Decline in sales volumes
The readings of the price indicators compared to the indicators of sales quantities show that the higher the prices, the lower the sales quantities! Accordingly, the current and upcoming period will be seen by focusing on these two indicators, as one of the signs of the bursting of the price bubble is that the quantities of sales and transactions begin to decline, as prices reach levels that exceed the purchasing power of individuals, although the period preceding its bursting has not seen real indicators confirming this matter. However, this speculation began to decline during the last two months, as shown in the last graph, which was reflected in the average price per meter of land plots, which declined during the past eleven months, compared to the same period last year, by about 23.2 percent, to settle at 510 riyals per square meter, compared to 664 riyals per square meter last year.
Surplus housing units

<The data shows that the surplus supply of housing units increased by about 635 thousand housing units, which is reflected on the ground by the crowding of advertisements and sale boards on the streets of cities and through the pages of commercial advertisements, in addition to other advertisements for the sale of plans and lands, which must be taken into account by individuals looking for housing for ownership, to correct the wrong idea about the lack of supply of housing units, which is the wrong idea promoted by real estate brokers to push prices up.
The excess supply of residential units is one of the most important indicators of the decline in purchasing throughout the previous period, meaning that the construction and reconstruction operations with the aim of selling did not coincide with buying at the same speed, as evidenced by the decline in the number of properties sold during the recent period, and the main reason behind the widening of this gap between the increase in supply and the decline in demand is concentrated in the rise in prices beyond the ability of individuals, and the parties (real estate developers) who built these units may bet on financing systems, collided with strict conditions to grant the necessary financing, especially the down payment requirement of 30 percent of the cost of the evil